This research examines the impact of investment language on Home Bias, investors’ tendency to prefer local over foreign assets. Across 12 rounds of incentivized investment decisions with portfolio return feedback after each round, 398 participants deciding in a foreign language exhibited no home bias, whereas those deciding in their native language did. A moderated mediation analysis further indicates that using a foreign language reduces fluency cues linked to local assets, thereby attenuating home bias. These findings extend the literature on the foreign language effect and suggest that encouraging foreign language use in investment contexts may reduce home bias and facilitate global market risk sharing.

This paper broadens the exponential utility function commonly used by risk-averse investors to the linear plus double exponential utility function, which is applicable in most cases. Thus it is of essential and supreme significance to conduct a research on its optimal investment portfolio in securities investment. This paper, by means of the non-difference curve method, carries out a research into the optimal portfolio decision-making by investors who have this type of utility function. The optimal decision-making and the ratio of optimal portfolio investment are derived. Finally, an actual case is given to verify the relevant results.